Equifax Risk Score

Equifax aims to provide assistance to both borrowers and lenders, bridging gaps and ensuring that deserving individuals get what is due to them. One such tool in its arsenal is the Equifax Risk Score which has been formulated for the Indian market, offering a host of features and benefits to members.

What is Equifax Risk Score?

The Equifax Risk Score is a special product which provides risk information to a particular financial agency. This score is calculated for every individual consumer and showcases the probability of him/her defaulting in a year. This score can be used by lenders to ascertain the financial feasibility of a particular transaction.

Benefits of Equifax Risk Score

Some of the unique benefits of Equifax Risk Score are mentioned below:

Prediction – The Equifax Risk Score predicts the likelihood of a consumer defaulting on payments in a year, thereby helping companies gauge and take necessary action against such potential defaulters. Lenders can come up with ways to prevent this default or could decide to cancel any loan application with a high probability of default.

In-depth information - The risk score has detailed information about an individual, with Equifax utilising the payment behaviour, demographics and credit history to formulate it. This information can be used by lending agencies to design new marketing strategies and build a strong consumer base, helping in both customer retention and acquisition.

Specialised design – The risk score from Equifax has been designed especially for the Indian market, keeping in mind the Indian financial values and local variations. All the data used in making this score comes from within the country, utilising local market knowledge to provide the best possible results. An Indian-centric approach helps both the lender and borrower.

Integration – The data used to develop a risk score incorporates information from a number of important entities, including market leaders and big names in the industry. This ensures that the score is reliable and has a certain credibility attached to it.

Market risk evaluation – A risk score helps evaluate market risks associated with an industry. A consumer can use this score to predict the chances of him/her getting a loan sanctioned and plan his applications accordingly

No-hits inclusion – Individuals with no credit history, more often than not, find it hard to acquire loans from financial institutions, as they are treated as nomads. As a result, individuals in need of credit fail to get the required funds. The Risk Score from Equifax includes such individuals, referred to as ‘no-hits’ thereby, helping them (new borrowers whose credit data is unavailable) get access to credit. Students and entrepreneurs among others can thus find avenues to avail of a loan.

Flexibility – This score has been designed to ensure a seamless integration with any existing standards in the industry. The score is easy to understand and can act as a standard for members.

High quality – The risk score prepared by Equifax adheres to international standards, ensuring that there are no glitches and errors. This means that members can trust the score without having to worry about its veracity and authenticity, helping them focus on other areas.